Broker versus producer (versus insurer) and Alice example

Is a broker and a producer the same thing? If not, what's the difference?

Also I am confused. In the Alice example, you say Alice's favourite surplus line insurer is domiciled in Alaska. Is the broker also licensed (or not) in Alaska? Why are we commenting on the licensing on the broker in relation to Alaska?


  • In general, the difference between a broker and a producer is that the broker works for the insured (the client) and the producer works for the insurer. (So a producer and an agent are very similar.) Some states actually say producers and agents are exactly the same thing. Individual states may vary.

    About that Alice example in HI and AK: I'm starting think it was more confusing than helpful. Sorry! Anyway, here are the points I was trying to make:

    • the difference between a foreign insurer (means out-of-state) and an alien insurer (means out-of-the-country)
    • Brokers are licensed by the insured's state so if HI doesn't have any licensing requirements then Alice may have a wider range of brokers to choose from in HI. Even if AK requires brokers' licenses, they can't stop an unlicensed broker in HI from selling Alice insurance from an insurer in AK.
    • On the other hand, insurance companies are subject to uniform eligibility standards so the brokers in HI would know that the insurance companies in AK follow these standards

    I hope that made it at least a little more clear. I've made the following point in a few places in different wiki articles, but it's important so I'll say it again:

    • New readings are often difficult to study because we just don't know what the examiners will focus on. You will likely end up studying more than you need to just to make sure you cover everything they could possibly ask. The upside is that questions on new readings tend to be pretty easy. If you memorize 2 or 3 of the important bullet lists, and have an overall understanding of what the reading, you should be ok.

    My final advice in these last days before the exam is make sure you're really solid on the key provisions of the NRRA and can provide a short explanation of each provision. I suspect that's a very likely question.

  • Ohh ok. Thank you! A little confusion encourages me to learn and remember, so no worries at all.

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